Opinion: We Need A New Plan For College Loans

The views and opinions expressed below are those of the author and do not necessarily reflect the official policy or position of the Libertarian Party of New York. 

By Brandon Lyon, Chair, Fulton County Libertarian Party

There’s been talk about forgiving student debt. And while I personally would greatly benefit from such a plan, it is the wrong one.

Government created this crisis by first guaranteeing private loans and then also providing loans themselves. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act was passed with the help of Senator Biden, meaning students still have to pay off their loans even if they declare bankruptcy.

All of this has increased the cost of college by over 497% from 1985 to 2017, double what inflation was. Instead of shifting the burden from student borrowers to all taxpayers, many who made the decision not to go to college or paid off their loans, we need a systemic change.

The DOE needs to withdraw from making and guaranteeing loans, so lenders assess the risk of making the loans they’re issuing.

The current option of making income-based payments helps students that are struggling and should be continued.

Lastly student debt needs to be dischargeable in bankruptcy. This is a systemic change that would rein in ballooning college costs, transfer the risk to lenders and make students choose to go to college for a reason and not “just to go.” Higher education should be for necessary learning needed for the field you plan to go into.

This plan balances personal responsibility with compassion for those drowning in debt without unduly burdening others. For more rational Libertarian policies and plans, go to lpny.org or lp.org.

Originally published in the The Daily Gazette, January 13, 2021

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